July 4, 2025
Rubber India
Overview
Today, Japanese rubber futures continued their upward trend, marking the third consecutive week of gains. The increase is attributed to adverse weather conditions in Thailand, the world’s largest rubber producer, which have limited production. However, sluggish demand and high inventories in China are restricting further price increases.
Market Highlights
Japanese Rubber Futures:
The December rubber contract on the Osaka Exchange (OSE) rose by 2.4 yen, or 0.77%, reaching 312.9 yen ($2.16) per kg.
This week, the contract has shown an overall increase of nearly 1%.
Shanghai Futures Exchange (SHFE):
The September rubber contract fell by 5 yuan, or 0.04%, settling at 14,050 yuan ($1,960.92) per metric ton.
The August butadiene rubber contract also saw a slight decline, dropping 20 yuan, or 0.18%, to 11,250 yuan ($1,570.13) per ton.
Singapore Exchange (SICOM):
The front-month rubber contract for August delivery last traded at 164.7 U.S. cents per kg, reflecting a modest increase of 0.5%.
Weather Impact
The Thai meteorological agency has issued warnings of heavy rains from July 3-6, which may lead to flash floods. While these weather conditions could support rubber prices by limiting supply, they also coincide with low demand, particularly from China.
Demand Concerns
Farah Miller, founder of Helixtap Technologies, noted that despite potential weather-related price support, the critical issue remains low demand. High inventories at Chinese ports indicate stagnant consumption and an increase in supply, which negatively affects market sentiment.
Future Outlook
As the rainy season in major Southeast Asian rubber-producing countries comes to a close, an increase in rubber supply is anticipated. This could further influence prices, especially if demand does not improve.
Additional Market Information
The dollar slipped by 0.2% against the yen, trading at 144.69 yen. A stronger yen makes yen-denominated assets less attractive to international buyers.
The Nikkei index in Japan rose by 0.11%, reaching a peak earlier in the session.
Conclusion
The natural rubber market is currently influenced by a mix of supply constraints due to weather conditions and persistent demand issues. Traders and stakeholders should monitor these factors closely as they navigate this complex market landscape.
